The dilemmas facing higher education are all too well known: increasing pressures for a much better educated population and workforce; the recognition that the additional students will be lower income and less well-prepared academically; a dramatically reduced state investment in higher education; and the reliance on increased tuition revenues (and rates) to close the funding gap. A college education is becoming less and less affordable, especially for these low-income students who must be brought into the system—making affordability a political hot button.

In this environment, the nation’s institutions of higher education must take the lead in ensuring that college remains (and is made more) affordable to the students who must be served. Families can’t do it alone, and governments at all levels are increasingly politically unable to do more than they’re already doing. Containment of price increases to no more than increases of family income should be the minimum expectation.

Assuming this challenge—and responsibility—will require extraordinary leadership skills by college administrators. They have little choice but to take this plunge. They can no longer solve their budget problems by increasing prices to the point where they make it impossible for large numbers of students to attend, nor can they achieve success by dismantling their institutions through an on-going series of short-term cost-cutting moves. A fundamental rethinking of the basic business model is in order.

What is required is nothing less than a change in institutional cultures. The basic assumptions of old models and cultures must be systematically picked apart, seriously examined and put back together in new configurations that hold the promise of both cost containment and improved educational outcomes.

On the academic side of the house, The National Center for Academic Transformation has proven that attaining both of these objectives simultaneously is possible. The secret is redesigning the way courses are taught; the challenge is taking the lessons learned to scale. The requirement is to look at all functions of the institution through the same lens.

Higher education is a labor-intensive enterprise. Any approach to developing a new business model necessarily will involve changing the way that the human assets of the organization, its faculty and staff, go about doing their work. Addressing alternatives requires:

Developing an inventory of the resources available for assignment to necessary institutional activities. These resources include vendors, open-source materials and students, as well as the faculty and staff most often considered as deployable resources.

Making cost-effective allocations of resources to tasks—what tasks make best use of the unique talents of full-time faculty, which can be performed equally well (or better) by individuals with other sets of skills.

(More information can be found in “Responding to the Challenge of Sustainability,” by Sally Johnstone and Dennis Jones, forthcoming in Change magazine.)

Because teaching is a craft passed on to new entrants to the guild by the current practitioners, it is the height of folly to attempt changes to conventional approaches to the core business of higher education without the active engagement of the incumbent practitioners. There is urgency associated with this task.

There is no off-the-shelf recipe for leading change of the type being promoted here. But several ingredients in that recipe are known:

Change can’t be designed in a cocoon and be expected to turn into a butterfly when it’s released. Those whose work will have to change will have to be engaged in the rethinking process.

Information is a useful tool in building understanding of why change is necessary. This can take several forms: projecting trends into the future, comparisons with similar institutions, etc. Change is best motivated by a purpose that those affected buy into; fear may be a motivator but it’s a poor device for enlisting help in finding solutions.

There is no single right way to carry out the academic functions of an institution. There is plenty of room to explore options. This exploration will be more productive if approached systematically, which means making exhaustive lists of potential resources and tasks to be performed, and evaluating alternative ways of accomplishing these tasks. This process was described above. (More information about this view of the world can be found in Background Papers, Convening on Financial Data in Higher Education.)

In late spring, the National Center for Higher Education Management Systems will launch an interactive tool that allows straightforward analysis of the revenues and costs associated with different ways of assigning resources to tasks. It is designed for collaborative investigation and decision-making and will provide a shortcut to fleshing out the template described above in that it incorporates well-vetted lists of both resources and activities as they apply to instructional activities.

Success will be sustained in those institutions that 1) recognize the need for cost containment; 2) understand the need to adopt new business models, at least for providing education to certain student populations and in certain programs; and 3) embrace the pursuit of different approaches to their core mission. Because the key requirements for success involve changes in the work being performed by members of the campus community, leaders will have to create and manage difficult change processes if they are to be successful. And for most institutions, failure in this regard is not an option.

Dennis P. Jones is president emeritus of the National Center for Higher Education Management Systems. He has more than 40 years of experience in research, development, technical assistance and administration in the field of higher education management and policy-making.

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